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5/10/14

Alfonso Ugarte is the main team from the city of Puno in Peru and plays in the country's second division. Today, playing against Alianza Universidad de Huánuco,five of the Alfonso Ugarte players were sent off in the first half of the match at which point, down by three goals to zero, the referee called a halt to proceedings due to the FIFA rule that automatically forfeits a game if a team has less than seven players on the pitch.

As well as the five players sent off, Alfonso Ugarte's manager was also shown the red card. And of the five players given marching orders, two of the Alfonso Ugarte players were shown red for fighting each other. After the shortened game, the Alfonsdo Ugarte team captain apologized to his home city fans by saying, "The guilty party of the poor spectacle today is the referee".

5/9/14

So I was in the kitchen on Wednesday making lasagna (in fact, lasagnas in the plural*) and decided to rustle through the old music CD drawer to have some jolly tunes while giving the tomatoes the passata treatment. After flicking past a few, mine humble eye fell on Achtung Baby. "That'll do" I thought and stuck it on. The news is that the album has aged really well, so many strong tracks on there even in 2014 terms and this...

...is, for me, the one that stands out. What a great piece of music. Lasagnas* turned out well, too.

Some of the problem is that the piece of crap mining companies like Great Panther Silver (GPL) (GPR.to) will never, ever point you towards their weaknesses as companies and will offer up the figures that best suit themselves. Another part of the problem is that people are lazy and don't bother looking any further than the news releases. Another again is that when they do, it might not be so obvious what's going on. Also a significant chunk of the problem is that the shyster management teams such as GPR's will hire paid pumper assholes such as "Mexico Mike" Kachoweveryouspellit to soft soap their sheep into believing all is well, when it most obviously is not well.

GPR is out with its 1q14 numbers this evening and has reported yet another net loss, but throws sand in the eyes of the herds by blaming minor level downtime while trying to highlight costs that are under control. Here's the reported COGS from GPR and at first light it looks that way, more or less capped by the $10m line.

But the question always arises as to why, if GPR insists that its cash cost figures per ounce of silver are much lower than the selling prices for its ounces of silver and that it's trimming things like G&A hard, is the company reporting losses. The basic answer is that the reported COGS above is a crock of shit and completely ignores the amortization and depreciation (A+D) charges that the company has to register. And GPR is keen on doing just that because it knows its mines are old and inefficient craphole assets that get more and more expensive to mine every freakin' year (all these Mexican "oh they were great historic mines for decades and they closed down due to low costs and then we were so smart and opened it up again when silver started shooting up in price" stories , and there are dozens of them, will all suffer from this same Achilles' Heel, precisely because they are piece of shit mining assets) so it does its best to hide Amorts+Deprec away from your innocent eyes. But when you put the two onto one chart...

...you see that A+D has been rising fast and eating into the revenues, all while GPR insists its cash costs aren't going up. And people, like it or not it's vital you include A+D into your true costs because if you don't you're basically saying, "oh yeah, we have this non-renewable fixed asset and we're mining it and we've taken out X amount of metal from the rocks....but the asset isn't going down in value, honest". In short, excluding A+D from cash costs is sheer bullshittery and GPR knows it, but they're not going to tell you that little inconvenient truth (and neither are the bullshit paid pumpers like Mexico Mike).

I digress (and repeat). So back to the issue at hand and when you now stack COGS-plus-A&D against revenues...

...you see how the mine is way, way less sexy and profitable and cool than it used to be. In fact subtract one from another to get gross profits...

...and that's your chart. And therefore, if you can't even make a freakin' gross profit before G&A and stuff are charged, you have no chance of returning a net profit...

...as this final chart shows. Yes, that does indeed illustrate how GPR has returned an aggregate net loss of $14.616m over the last six quarters, which is also the main reason why its total assets figure has dropped by nearly nineteen and a half million over the same period (but let's not go to the balance sheet today, because there's things there that aren't just bad, they're gawdawful).

Anyway, bottom line, read the quarterlies and not the NRs to get a real handle on what's going on at these piece of shit small mining companies that continually swallow your money and convert it into director's salaries.

5/7/14

After reading the Globe & Mail feature on Belo Sun (BSX.to) a few weeks ago, (March 8th to be exact) the one that had BSX's main man Mark Eaton as focus of attention as he went through his pastiche Englishman abroad routine for the entertainment of locals (it's all done on purpose you know), your humble scribe has been a little concerned for the dude and the question of whether Eaton has totally screwed his own pooch has floated round the office, on and off, for weeks.

Today while watching the latest severe downleg in the BSX share price take place the whole issue came to a head, so it was off to SEDI to find out more. And it turns out that unlike so many other people connected (directly or otherwise) to the Forbes & Manhattan shyster Bharti, Eaton's been remarkably constant and loyal in his dealings with BSX shares. For example, at the end of 2011 he owned 2.663m shares of the company and he's constantly added to his position since then, without selling a single share along the way. That's an admirable attitude from a company chief and one that needs cheering, as today he owns 7,227,500 shares, which means he's added 4,564,500 shares to his holdings during 2012, 2013 and 2014 to date.

This chart gives you a breakdown of those purchases and how much they cost him at the time, compared to how much they're worth today:

In the course of his admirable loyalty and belief in the cause of BSX since 2012 (and remember, he was holder of more shares before then at higher prices) Eaton has spent $1.959m on BSX equities. Unfortunately, these days those shares are only worth $912,900, so our fine upstanding fellow is more than a million in the hole here. Still, I'm sure that everything will work out just fine because Stan Bharti isn't likely to leave his long-time associate holding a fucking big bag forever and screw anyone just for the sake of money, right Stan? Right?

It'd be interesting to hear the Northern media give us an opinion or two about the findings illustrated by this chart, one that uses several different and established methods for measuring well-being in a population.

C'mon press lackey corrupt motherfuckers, tell us about the real Argentina for a change, not the agenda you're paid to promote.Data from here.

A decent handful of readers* have already sent this link into IKN Nerve Centre™ which means it's our duty, nay obligation, nay pleasure to disseminate it further and spread the love around. If thisisn't the worst piece of analysis published on a gold mining company this year it's definitely going to be a contender for the crown, but the real reason you need to read it is for the sheer comedy value.

"Building the Constancia mine will cost about $1-billion, which HudBay said it can do with existing cash and credit lines."

That thing is from the latest MD&A

"At our 100% owned Constancia copper project in Peru, the project was over 71% complete on a proportion spent basis at the end of March 2014. Of the total project capital budget of US$1.7 billion, we have incurred approximately US$1.2 billion in costs to March 31, 2014 and entered into an additional US$200 million in commitments."

An impressive scandal has hit Colombia, just a couple of weeks before the Presidential election round one (we'll get a second round, worry not). Last night President Juanma Santos accepted the resignation of his cheif campaign advisor, JJ Rendón, due to widely reported press accusations he took a "personal donation" (I think that's the phrase they use) of U$12m from narcotraffickers.

And yes, this is the very same JJ Rendón that has been at the throat of the Venezuela government for years, with too many examples to offer in a short post but just as one, that wonderful "Hugo Chávez is alive and well" attempt at government destabilization in Spetember last year.

Here's the bigfun NR which caused the sell off. And yes, read it twice and let the way it was framed as excellent news sink in slowly. Now apply that mindset to at least 50% of the junior mining companies out there.

And yeah I'm short GORO. Been shorting the thing all the way down since that fool Doody was waxing lyrical about it in the U$20s. Bite me.

The Economist does a service to all of us (definitely includes this humble scribe) who have no inclination to read Piketty's book but want the simple, nail-the-essence summary of what's going on. Your link is here, well worth five minutesof your time to get a handle on what all the fuss is about.

And r>g makes perfect sense because round these parts it stares at you in the face 24/7. Great marketing too, up there with emc2, snowball earth or selfish gene.

5/5/14

So it turns out the small aircraft lost over the Coromoro area of Santander region, Colombia on Saturday was working for a geological surveying company, was carrying two Canadian geols running airborne surveys on the copper property in that location

And that the plane was shot down by ELN terrorists.

UPDATE: The two people in the plane have now been confirmed dead. (photo of the Colombian army at the crash site on that link). IDs of the two dead have not yet been revealed .

Goldcorp (GG) today announced that the Mexican Stand Off (literally) between themselves and landowners at the Los Filos gold mine in Guerrero State Mexico is now over and the company is now back to work. But what they didn't tell you about was the deal struck because after swearing blind they couldn't afford a penny more than the previous 2.5 oz of gold per hectare they were paying for land use and rejecting out of hand the deal of 4.5 oz offered by the landowners,the two sides have settled at 4 oz.

So there you go, GG loses a month's worth of production and gets another light shone upon its dubious reputation in Latin America for the sake of half an ounce of gold. Fuckwits.

As part of SRK's engagement and the ongoing development of the project, SRK reviewed the inferred gold resource estimate prepared by Coffey Mining Pty Ltd ("Coffey"), which was set out in their NI 43-101-compliant technical report dated effective November 23, 2012 and filed on SEDAR on March 14, 2013. In the process, SRK identified issues with respect to certain estimation methodologies employed by Coffey which SRK believes materially overstate grade and contained ounces.

Mine Development Associates ("MDA") was subsequently engaged by Columbus Gold in an effort to resolve the differences in the methodologies used by Coffey and those considered appropriate by SRK, both internationally respected and recognized independent mining consultancies. MDA's conclusion supports SRK's recommended methodology.

In the interest of providing timely public disclosure, Columbus Gold has not yet had the opportunity to obtain comment from Coffey on their choice of methodologies used in their resource estimate.

"What?" they gasped as one, "a man with the last name Giustra involved in a bullshit junior story? Surely not!".

So those visitors who look upon IKN as a source of potential class action leads (and my stars, we know you're out there guys), look no further.

5/4/14

According to exit polls and reports thereof (here's the link to an English language note), Juan Carlos Varela has won the Panama Presidential election with around 39% of the popular vote, seven ahead of his nearest rival. So now you know

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